Money Management

The appeal of CDs is likely to wane in the coming year. Read on to see why. [[{“value”:”

There’s a reason CDs have been a pretty popular savings option this year. For much of 2024, it was possible to lock in a 5% CD. And while rates have fallen slightly over the past month following the Federal Reserve’s September benchmark interest rate cut, many CDs are still paying close to 5% today. That makes them a good option like they were earlier on in the year.

But if you ask me, I don’t think nearly as many people will be lining up to open CDs in 2025. Here’s why.

1. CD rates are likely to keep going down

The Federal Reserve isn’t done cutting interest rates. Its mid-September rate cut is likely to be the first of many.

But as the Fed continues to cut rates, CDs are going to start paying less. And there may come a point when savers say that they’re not willing to commit to a CD if there’s minimal upside.

How low will CD rates go in 2025? That figure is hard to pinpoint, and it depends on how rapidly the Fed seeks to lower interest rates. And that will largely depend on how inflation trends. So all told, there are numerous factors at play.

But it wouldn’t be surprising to see CD rates drop to 2.5% to 3% by the end of 2025. Whether it’s worth committing to a CD at a rate like that is up to you.

Remember, the S&P 500’s average annual return over the past 50 years is 10%, accounting for strong years and weak ones. Even though stock investments carry a lot more risk than CDs, if you have money you’re earmarking for a far-off goal, then it could pay to open a brokerage account and use it to invest in stocks rather than open a CD in 2025.

2. Borrowing rates are likely to drop

CD rates and borrowing rates tend to trend in the same direction. Right now, both are up. As the Fed continues cutting rates, both are likely to fall. But that could lead a large number of consumers to spend their money in 2025 rather than save it.

For example, right now, personal loan and auto loan rates are pretty high. But if those rates fall in 2025, more people may be inclined to borrow money to finance purchases like furniture, vacations, electronics, and automobiles. And they may be willing to pull money out of the bank to pay off those debts, or to make down payments where applicable.

Of course, you shouldn’t randomly borrow money in 2025 just because rates are lower. But if you’ve been saving for a specific large purchase — like a new car to replace your current vehicle that’s been giving you trouble — you should know that you may end up in a better position to move forward on it in the new year. And in that case, it could make sense to use your money to fulfill a need — like replacing a car — rather than opening a CD.

Should you lock in a CD now?

All told, I expect CDs to be less popular in 2025 than they are today. But what about today? Should you open a CD while rates are still close to 5%?

The answer depends on your situation. If you’re saving for a short-term goal, then I’d recommend that you shop around for the best CD rate and open a CD before rates fall further. But for a long-term goal, I’d recommend creating a stock portfolio.

You also don’t want to tie up any money in a CD that you might need for emergency fund purposes. So before you contemplate a CD, make sure you have enough money in savings to cover at least three full months of essential bills.

Remember, too, that even if CDs become less popular in 2025, it doesn’t mean you shouldn’t buy one. The point, rather, is to be mindful of the reasons why CDs may become less popular, since they have the potential to impact your finances.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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A balance transfer card could help you pay down your debt. Read on to find out how these cards work. [[{“value”:”

Opening a new credit card account usually isn’t a good idea if your finances aren’t in a great place. However, there is one type of credit card that can help you get out of debt if you use it correctly.

With a good balance transfer card, you can move your credit card balance and enjoy a low introductory rate, often 0%, which can help you pay down your balance interest-free. Here’s how to do it and what you should know before choosing a card.

How a balance transfer card could improve your finances

Balance transfer cards are credit cards that offer low introductory rates for a set period of time, usually between 12 and 21 months. Most of them charge a transfer fee between 3% to 5% of the amount you move onto the new card. While the fee will cause your balance to increase, it could benefit you over the long term as you make payments with low or no interest.

For example, the average American household with credit card debt has a balance of $6,065, and the average APR is about 23.4%. Let’s compare two scenarios, one with the original balance and high rate versus a transferred balance and a low intro rate.

If we move $6,065 to a balance transfer card with a 0% introductory rate, we might pay a 3% transfer fee of about $362, bringing the new balance to $6,427. Here’s how these two scenarios might play out:

If you open a balance transfer card using this scenario, you’d pay a $362 fee but avoid $1,637 in interest payments, saving you a total of $1,275! You’d also pay off your balance five months earlier. That could be a significant way to ease the burden of paying off your balance.

We’ve reviewed the best balance transfer cards for you. Click here to see which ones top our list.

How to decide if a balance transfer card is right for you

Balance transfer cards aren’t for everyone, so before you apply for one, you should consider these factors.

1. Weigh the fee

First, as mentioned above, you’ll likely have to pay a transfer fee to move your balance. Most fees will be between 3% and 5%. This means a $5,000 balance with a 5% transfer fee will become $5,250. Do the math beforehand to ensure you’re comfortable with your new balance. Also, most of these cards won’t charge you an annual fee, but you should check first just to make sure.

2. Check the rewards

Some balance transfer cards earn rewards, like cash back on purchases. If you see a few cards with similar terms but one has generous cash back rewards, it might be worth picking that one over a card that doesn’t offer any. After all, you may want to use the card for purchases once you pay off your existing balance, so pick one that fits your needs.

Not all rewards cards are created equal. Click here to see top-rated cash back rewards cards.

3. Consider the rate

While many balance transfer cards have 0% introductory APRs, not all do. And even if you get a 0% intro APR, you should also consider the card’s go-to rate after the introductory period ends. Ideally, your balance will be paid off before then, but it’s wise to look at how high your APR might be once the introductory rate expires.

The most important thing to remember with balance transfer cards is that you shouldn’t put any new purchases on the card. To use your card effectively, don’t charge more to it while paying down your balance. This will help you pay off your balance faster and ideally eliminate your debt before the higher go-to APR kicks in.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Real-time payments can save small businesses on fees, improve cash flow, and offer customers faster, more seamless transactions. Here’s how to get started. [[{“value”:”

Today’s customers expect quick, seamless transactions, and small businesses are under increasing pressure to deliver. Many small businesses rely on credit cards to accept payments, which can be costly — averaging around 2.24% of each transaction.

Instant payments may offer a convenient solution that helps businesses cut down on processing fees and provides customers with the choices they want. Want to learn more about real-time payments and how they work? Here’s what your small business needs to know to stay competitive, improve cash flow, and deliver a better customer experience.

What are instant payments?

Instant payment refers to several different infrastructures used to transfer funds in real time or near real time. Unlike traditional payment systems, also called payment rails, which can take several days to process, real-time payments deliver funds in minutes or hours.

While the term “real-time payments” refers to the broader concept of instant payments, keep in mind that RTP (real time payments) refers to a specific payment rail. There are currently several different types of real-time payments in the U.S.:

FedNow: A real-time payment service developed by the Federal Reserve and launched in 2023. It is designed to make instant payments more accessible across the U.S. financial system.RTP (Real-Time Payment Network): This network, operated by The Clearing House (the same organization that processes ACH payments), has been in place since 2017. It facilitates real-time transactions for banks and their customers.Same-Day ACH: Though not as fast as the other two payment rails, same-day ACH offers an expedited version of the traditional ACH transfer, often processing payments on the same day.

Why does this matter for small businesses? Real-time payments are fast becoming one of the most popular types of payments worldwide. In 2023, there were 266.2 billion real-time payment transactions.

Need access to cash for your small business? Check out the best small business loans.

Instant payments are cheaper and improve cash flow

For small businesses, embracing real-time payments has several advantages. For starters, it’s usually cheaper than credit cards, which come with high processing costs. Same-day ACH generally costs between $1 and $5, no matter how much money is transferred. RTP costs are typically around $0.25, while FedNow charges a $25 monthly fee and generally less than $0.01 per transaction, depending on the type of transaction.

Switching to instant payments can save small businesses thousands of dollars in processing fees annually. Assuming $100,000 in annual sales and 1,000 total transactions, here’s an estimated cost breakdown for each payment rail:

While this estimate assumes all customers use the same payment rail (which is unlikely), the cost savings of real-time payments can’t be ignored.

Real-time payments also deliver funds to your business in a day or less, making it easier to manage cash flow. Instead of waiting for credit card batches to process before you can order more stock (or relying on business credit cards or loans to bridge the gap), your business gets immediate access to funds.

What to consider before implementing real-time payments

Before diving head-first into real-time payments, there are a few considerations to keep in mind. While real-time payments will give you faster access to cash, the fees can vary by service provider. Some banks may tack on additional fees, so make sure to weigh the true costs compared to the resources you’ll need to implement them.

Another consideration is customer demand. If you see customers face to face, ask them if they would use real-time payments. This will help you judge whether it’s worth adding real-time payments before investing time in implementing them.

How to implement instant

Implementing instant payments might be easier than you think. Many banks and financial institutions have integrated RTP or FedNow into their banking services, and opting in might be as easy as calling your bank. Payment processors like Stripe, PayPal, and Square often offer options for faster payouts. While they aren’t always connected to official real-time payment networks, they can still provide near-instant access to funds.

As a small business, you need to stay competitive. As instant payments become more popular, make sure you understand them and how they could benefit your business.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends PayPal. The Motley Fool recommends Flow and recommends the following options: long January 2027 $42.50 calls on PayPal and short December 2024 $70 calls on PayPal. The Motley Fool has a disclosure policy.

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Want to serve a tasty Turkey Day feast while staying on budget? With this Aldi shopping list, you can prepare a winning meal for 10 for $47. Find out how. [[{“value”:”

If you’re looking for a way to make your family’s Thanksgiving gathering more affordable, you’re not alone. A trip to the grocery store can quickly become expensive, especially around the holiday season when you’re buying ingredients to cook a big meal for extended family and friends. But I have some welcome news for your wallet.

Aldi recently announced it would slash prices on many popular Thanksgiving food items. Thanks to these even lower prices, shoppers can buy and prepare an entire Thanksgiving meal to feed 10 eaters for under $50. Find out how to plan a winning holiday feast that won’t break the bank.

Aldi can help you host an impressive holiday meal on a budget

Going shopping during the busy holiday season is already stressful enough because of traffic and crowds. The last thing you need is added stress about the cost of your shopping trip.

But Aldi recently reduced the price of many essentials, including popular holiday food items typically included on a Thanksgiving table. The newly lowered prices could help more families celebrate the upcoming holiday without draining their checking accounts.

Thanks to recent markdowns, shoppers can serve a holiday meal for 10 for an affordable price. The retailer has compiled a suggested list of Thanksgiving essentials that cost only $47.

Here are the items included in Aldi’s Thanksgiving meal shopping list and the suggested quantities to buy to feed 10 people:

With these items in your cart, you’ll have what you need to prepare a complete Thanksgiving feast: turkey and gravy, stuffing, mashed potatoes, macaroni and cheese, sweet potato casserole, green bean casserole, cranberry sauce, and pumpkin pie.

Prices may vary by location and are subject to availability. But you can expect to pay around $47 for the above essentials. If you want to serve a delicious Thanksgiving spread, Aldi could help you get what you need to impress your guests without ignoring your financial goals.

Don’t ignore opportunities to earn rewards

Whether you get your holiday essentials from Aldi or another retailer, shopping grocery deals like this can make it more affordable to celebrate the holidays with your friends and family. In addition to saving money by shopping deals, take advantage of the chance to earn rewards with the right credit card in your wallet.

Want to save even more by earning cash rewards? Check out our list of the best cash back credit cards that offer big rewards.

Aldi isn’t the only retailer that can help you save on Thanksgiving

Don’t have an Aldi nearby? There are other retailers with great deals on holiday meal essentials. One example is Costco.

The warehouse club retailer has members-only prices on turkey, fresh produce, baked goods, and prepared sides. With a Costco membership, you can save money by getting what you need to prepare a delicious Thanksgiving meal at your local club. If you’re not a member, consider joining before the busy holiday season.

Costco membership costs $65 or $130 per year depending on membership level. While this is an investment, Costco has a 100% satisfaction guarantee on memberships. If you’re unsatisfied, you can cancel your membership, and Costco will refund your membership fees.

One final tip: Remember to pay for your Costco haul with a rewards credit card. You can maximize your savings by earning rewards every time you shop at Costco. Click here to review our list of the top credit cards for Costco and see how easy it is to earn rewards.

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Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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